Indian Railway Finance Corporation (IRFC) Ltd., the financing arm of Indian Railways, reported a steady 4.41% year-on-year increase in net profit for the second quarter of FY25, totaling INR 1,612.65 crore. This marginal uptick from INR 1,544.58 crore a year ago underscores IRFC’s resilience in a challenging market.
Revenue from operations also saw a slight increase, rising by 2.05% to INR 6,899.34 crore, up from INR 6,761.02 crore in the same period last year. Alongside the results, IRFC announced an interim dividend of 80 paise per share, with November 12, 2024, set as the record date.
IRFC’s financial stability was further reflected in its net worth, which climbed to INR 51,464.12 crore as of Q2 FY25, marking an increase from INR 46,883.22 crore a year ago. The company also improved its debt-to-equity ratio, now at 7.83, compared to 8.67 in the previous fiscal year—a promising sign of financial discipline.
Despite the positive results, IRFC’s stock took a slight hit, slipping 2.85% to close at INR 153.45 on Monday. Nevertheless, the stock has surged by 52.88% so far in 2024, signaling investor confidence in IRFC’s long-term potential. On Monday, trading volume was slightly muted, with around 20.24 lakh shares traded on the BSE, falling short of the two-week average of 31.51 lakh shares. The day’s turnover came in at INR 31.20 crore, giving IRFC a market capitalization of INR 2,00,536.22 crore.
In terms of valuation, IRFC’s P/E ratio stood at 32.01, with a P/B value of 4.20. Earnings per share (EPS) reached 4.93, while its return on equity (RoE) remained robust at 13.11%, a reflection of its stable earnings.
IRFC plays a crucial role in financing Indian Railways’ projects, borrowing from financial markets to fund assets that it then leases to Indian Railways or affiliated entities. As of September 2024, the government holds a commanding 86.36% stake in this 'Navratna' PSU, but is it worth adding to your portfolio as well?
For a crystal-clear decision, you should check out the fair value of IRFC on InvestingPro+ which will give you a definite status of the valuation of the counter.
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